The domestic business travel market is accelerating its recovery, and the global market as a whole is expected to recover by 2024
According to data released by GBTA (Global Business Travel Association), global business travel expenses decreased by 51.5% to $694 billion in 2020. Under the impact of the epidemic, although the recovery situation is more optimistic compared to most countries in the Asia Pacific region and around the world, the expenditure scale of China's business travel market has also decreased by 38% in the past 2020. "Ctrip Business Travel pointed out in the latest" 2020-2021 China Business Travel Management Market White Paper "(hereinafter referred to as the" White Paper ") that in the long run, the development fundamentals of China's business travel market are good. With the accumulation of epidemic prevention experience and the continuous popularization of vaccination, there is still significant growth space in the domestic business travel market. However, the white paper also points out that it may take until 2024 or even longer to fully recover to pre pandemic levels, and the future is still filled with a lot of uncertainty.
The global business travel recovery is still uncertain, and the domestic market is the first to recover
According to the Global Business Travel Association (GBTA), the loss of business travel expenses in 2020 is expected to be 10 times greater than during the 2008 financial crisis.
The white paper shows that the pandemic has brought high challenges to the global business travel market. Among them, Western Europe and North America are more severely affected by the epidemic, and relatively speaking, business travel in the Asia Pacific region is expected to recover to pre epidemic levels faster. At present, the Asia Pacific region remains an important component of global business travel expenditures, followed by North America and Europe, which accounted for 90% of global business travel activities in 2019.
Business travel in the Asia Pacific market has grown at an average annual rate of 7.3% over the past 20 years, higher than the global average annual growth rate of 4.5% during the same period, with current expenditures accounting for approximately 43% of the global market. In 2019, influenced by factors such as the slowdown of the travel market and the COVID-19 pandemic in 2020, GBTA expects a 44% decrease in business travel expenses in the Asia Pacific region in 2020, lower than the 58% decrease in Western Europe and the 60% decrease in North America. The markets that are relatively more severely affected are mainly countries and regions that rely more on import and export business activities. Singapore expects a 82% decline in business travel expenses in 2020. Business travel in Hong Kong, China will also significantly decrease by 84%. Due to factors such as the slowdown in manufacturing, Japan's business travel expenses have also experienced a significant decline.
On the other hand, China's weight in the Asia Pacific business travel market has been increasing year by year, reaching 69% in 2020. Despite a general decline, China remains the world's largest business travel market. The International Monetary Fund (IMF) stated that China is the only major economy in the world to achieve positive growth in 2020, and China will inject more growth momentum into the global economic recovery. In 2020, facing the double impact of the COVID-19 and the deep recession of the world economy, China's economy will recover steadily and quickly. Relying on the new development pattern of internal circulation, the domestic business travel market has also reshaped a new development logic under the impact of the epidemic. Given the effective control of the epidemic and the shift in travel demand towards internal circulation, the recovery trend of China's business travel market is relatively more optimistic. It is expected that business travel expenses will decrease by 38% in 2020, lower than the decline in other countries in the Asia Pacific region.
There is also considerable uncertainty regarding the recovery of the business travel market in the foreseeable future. According to the forecast made by GBTA, in an optimistic scenario, global business travel expenditures are expected to reach approximately $1.59 trillion by 2024, which is about 11% higher than 2019 before the outbreak of the pandemic; In a pessimistic scenario, it is expected that global business travel expenses will only reach about $1.25 trillion by 2024. The comprehensive market expects that global business travel may only recover to levels close to pre pandemic 2019 levels by 2024.
Over 40% of corporate travel volume recovers, over 80% of lower tier cities show significant recovery
According to the white paper, 88% of business travelers stated that their travel in 2020 was greatly affected by the pandemic, with 51.1% of them stating that they did not arrange any business trips for 4-8 months. From the perspective of enterprise types, private/private enterprise travel activities are more affected by the epidemic; From the perspective of industry type, travel activities in accommodation and catering industry, resident service and other service industries, agriculture, forestry, animal husbandry and fishery, education, Internet industry, industry and other industries are more strongly affected by the epidemic.
In response to the impact of the epidemic on enterprises, research shows that "closer cooperation with travel suppliers and more refined control" has increased by nearly 10 percentage points, rising to the top 5. This indicates that companies are increasingly valuing the refined control brought about by professional travel management. From different types of enterprises, state-owned enterprises, central enterprises, and private enterprises pay more attention to controlling travel expenses and increasingly value close cooperation with travel suppliers.
According to a survey of corporate travel managers, as of the end of 2020, over 40% of companies had recovered their travel volume to over 80%, and 11.1% of companies had travel volume exceeding the same period in 2019. It can be seen that with the improvement of the epidemic situation, most enterprises have resumed their travel activities.
From the perspective of the popularity of travel demand in various industries, compared to 2019, the rankings of public utilities, manufacturing, scientific research and technology services, wholesale and retail, and real estate have all increased to varying degrees. Among them, the rise of public utilities closely related to daily life is more evident, and the importance of travel management is gradually being emphasized, becoming a new main force in the field of travel control.
From the perspective of travel recovery in various tier cities, the fourth and fifth tier cities are leading in terms of recovery in 2020. When overseas travel is restricted, many companies shift their focus to domestic travel and show a trend of urban subsidence. At the same time, the decline in travel purposes is somewhat related to the growth of short distance travel and intra provincial travel.
Due to the backlog of demand caused by the COVID-19 pandemic in 2020, many companies have already initiated projects since the beginning of 2021, which is a dual benefit for the recovery of the travel market. According to a survey conducted by corporate travel managers, the proportion of companies experiencing an increase in travel volume in 2021 is as high as 66.3%, with around 10% of companies expected to grow by over 50%. Additionally, 31% of companies reported that their travel volume remained relatively stable year-on-year in 2021.
Information source: Economic Reference Report
